“Halal” Insurance for Cars, Fires and Loans
The first branches of solidarity insurance in compliance with Islamic law (sharia) are expected to be launched in the first three months of 2022, with the same prices as the current classic insurance, and special privileges focusing on the quality of Islamic service, which will be either through “halal” offices of insurance companies or independent branches, with the sharing of the surplus of the annual Takaful (solidarity) Fund for customers, unlike what is dealt with in the current insurance, as the start will be with insurance for cars, accidents, people and Islamic bank loans, waiting to be rolled out to all other branches gradually.
A member of the National Union of Insurance and Reinsurance Companies, and Head of the Insurance Department of Risks for Privates and Professionals, Mahfoud Ziane Bouziane, told Echorouk that the first branch or independent takaful insurance company in Algeria is expected to open its doors in Algeria during the first three months of 2022, in partnership between the public insurance company “SAA” and some insurance companies and public banks, adding that the executive law framing the operation was issued a few months ago, pending the issuance of the implementation texts.
According to Ziane Bouziane, the takaful insurance will include in the first phase the sectors most popular with insurance company customers, whether people or risks, such as car and home accident insurance, bank loans and agricultural insurance, while he considered that the price will be the same as that is adopted for classic insurance services with some privileges, similar to distributing the surplus of the Takaful Fund annually to customers if the financial coverage exceeds the accident compensation registered, for example, in the car category, and the customer acts as a donor.
The representative of the insurance company “SAA” confirmed that what is currently lacking are the implementation texts framing the activity, such as the sovereign bonds that comply with the provisions of Sharia known as instruments, which are currently in the process of being issued.
“We are preparing the credit file in partnership with public banks and government insurance companies to establish an independent solidarity insurance company. The SAA is today launching the process of completing the feasibility study and the administrative procedures accompanying the project, and preparing the application file for accreditation”, he added.
For his part, a member of the National Federation of Insurance and Reinsurance Companies and General Manager of Alliance Assurances, Hassène Khelifati, confirmed to Echorouk that solidarity insurance is an important and necessary step in the insurance market in Algeria, appreciating what was published about the Solidarity Insurance Law issued in the Official Gazette, however, he said that this law includes only the general framework regulating the process, calling on the Ministry of Finance to expedite the release of the implementation texts so that the vision becomes clearer and that the insurance companies will be able to operate in this market, especially concerning Islamic instruments.
He asserted that public and private companies expressed their intention to launch independent branches in the field of Takaful insurance and even Takaful offices at the level of the current insurance companies, but the implementation texts framing the process must be completed, as the customer will turn into a contributor to the mutual and not just forced to pay insurance premiums, which will give customers many options in this area.